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Schmidt's questions pile up

Owners short on answers for workers, customers

By Tom Hacker Reporter-Herald Staff Writer

Posted:
01/10/2013 06:15:12 PM MST

Schmidt's Aisle 2 Bread and Bakery and Village Pizza in Estes Park are closed Thursday after being seized by state tax officials. Signs posted by the Department of Revenue indicate failure to pay sales and wage withholding taxes.
(
Walt Hester
)

Editor's note: This is an update to an earlier Reporter-Herald story.

Employees and customers of Schmidt's Bakery and Delicatessen in Loveland have questions about issues ranging from missing paychecks to stalled wedding cake orders.

But by late Thursday they had no answers.

Colorado revenue agents early on Tuesday changed the locks at Schmidt's -- and two Estes Park businesses under the same ownership -- and posted signs showing they had been seized for nonpayment of sales and wage withholding taxes.

Principal owners of all three businesses, Tracy and Deb Hilker, said late Thursday that they would like to honor their obligations to pay their 30 workers, and fill orders for customers, but that the state lockout prevented that.

"Our hands are tied at the moment," Deb Hilker said. "We're locked out. We can't even get in there to find out how much we owe people."

Tracy Hilker, during the same phone interview, said state revenue agents had told him that they would not be allowed to reopen their business within the next week regardless of whether they settle tax deficiencies.

'10-day Freeze'

"They've locked us down, and said there's a 10-day freeze on everything," he said.

The tax bills in Loveland and Estes Park total more than $82,000, according to documents that agents posted in the windows of the closed businesses.

Sales and wage withholding tax liabilities at Schmidt's in Loveland were $46,850, the postings say.

Similar documents on display in Estes Park show $36,307 in taxes owed. Both postings are accompanied by notices of public sale of assets, at an unspecified date, to satisfy the debt.

Tuesday is the Schmidt's weekly payday. Employees expecting to collect checks then found instead locked doors and seizure notices.

Some emailed the Reporter-Herald, or posted notices on the newspaper's Facebook page, wondering when they would collect what they are owed.

Reaching Workers

Hilker said he had been able to contact "only a handful" of employees to tell them he would honor his commitments. Deb Hilker said she had also reached out to their workers.

"We have a couple of people who don't have vehicles, and I even offered to take them to apply for unemployment," she said.

That statement, along with Tracy Hilker's consistent use of the past tense in referring to Schmidt's, raised questions about whether the business would reopen at all.

"It's not impossible," Tracy Hilker said. "I don't know. The trouble is, I don't know what they (tax collectors) are going to do."

Colorado Department of Revenue spokesman Mark Couch said Thursday he would contact agents handling the cases, but had not called back with specific information by late Thursday.

Estes Park Lockouts

In addition to the 30 people employed at Schmidt's in Loveland, another 12 work for the Hilkers in Estes Park at Village Pizza and Schmidt's Aisle 2 Bread and Bakery, two nearly adjacent businesses that were closed.

The Hilkers bought the Loveland bakery from founders Harry and Charlotte Schmidt in late 2011. By then, the founders had had similar tax problems that twice resulted in shutdowns of the business for nonpayment of taxes.

Harry Schmidt said Thursday he would be surprised if the Hilkers didn't reach an agreement with the state to settle the issue and reopen.

"That business does a lot of dollars," Schmidt said. "I can't imagine that there's not a way to work this out. I think that there are enough investors there that they're not going to let these things just fold up."

The Hilkers were joined by about a half dozen other investors when they bought the Schmidt's business, many of whom also share stakes in their Estes Park business enterprises.

Wedding Cake Woes

Loveland bride-to-be Jessica Osborne said Thursday she was prepared to make other plans for a Schmidt's cake for her Jan. 24 wedding.

"We had paid in full -- about $234," she said. "My fiancé knew the previous owners really well. We didn't even think about anywhere other than Schmidt's."

The Schmidt's lockout also hit Larimer County Commissioner Tom Donnelly and guests who join him regularly for a monthly meeting at the Schmidt's dining room.

County spokeswoman Deni LaRue said in a message emailed to regular Loveland guests that other arrangements would be made for future meetings.

"Commissioner Donnelly says he's sorry about the snafu with Schmidt's being closed when you got to his citizen meeting yesterday in Loveland," LaRue wrote.

"That was a surprise! Thanks to special guest Zac Wiebe for accommodating the group anyway, and we'll be looking for a new venue for that monthly meeting in Loveland."

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